The announcement could come by Tuesday, said the person, who asked not to be identified because they aren't authorized to speak publicly about the matter. The $1.6 billion figure would be more than three times the $469 million that Barclays bank agreed to pay in June to settle allegations that its employees conspired to manipulate the London interbank offered rate, or Libor, which is used in bank borrowing.

As part of the case, U.S. prosecutors are planning to file charges against multiple bankers associated with UBS's rigging of Tokyo interbank lending rates, according to another person with knowledge of the matter. The charges would be the first brought by the Department of Justice against individuals alleged to have manipulated Libor and comparable lending rates in Europe and Japan.

The prosecution is slated to begin in tandem with an announcement that UBS Securities Japan Ltd., the Japanese unit of the Swiss bank, would plead guilty to manipulating Japanese interest rates starting in 2007, said the person, who asked not to be named because the matter is private.

No guilty plea

Christoph Meier, a spokesman for UBS in Zurich; Liam Parker, a spokesman for the FSA; and Tobias Lux, a spokesman for the Swiss financial markets regulator, declined to comment on the settlement amount.

Karina Byrne, a spokeswoman for UBS, said last week in an e-mail: "We continue to work closely with various regulatory authorities to resolve issues relating to the setting of certain global benchmark interest rates. As we are in active discussions with these authorities, we cannot comment further."

Unlike the pending settlement with UBS, the Justice Department didn't require Barclays to enter a guilty plea to a specific charge. In deciding against a charge last June, prosecutors praised Barclays' "timely, voluntary and complete disclosure of facts."

UBS has been "granted conditional leniency or conditional immunity" by the Justice Department's antitrust division, in connection with potential antitrust violations related to submissions for interbank lending rates in Tokyo, according to the Swiss bank's most recent annual report.

Japan sanctions

According to Justice Department guidelines, a corporation can secure favorable treatment from prosecutors if it's the first to pledge full cooperation in an antitrust investigation. In order to win that leniency, however, the corporation has to include an admission that it was part of an antitrust conspiracy, and help identify other participants in the scheme.

One year ago, Japanese regulators sanctioned UBS's Japanese operations, curtailing the bank's ability to participate in the Tokyo interbank derivative market for a week, and ordering the bank to improve its compliance and internal controls.